Today in Digital Marketing - Amazon's "Secret Algorithm" Revealed in Court Details

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Starting point is 00:00:18 starting at $19 per month at zensurance.com. Be protected, be Zen. It is Tuesday, October 3rd. Today, was your brand on Amazon's hit list? The antitrust case alleges a secret algorithm kept Amazon on top. Also, agencies are using less of Facebook. How much of your brand's images are in Meta's AI training pool. And is it over? Have social media users stopped wanting to be real? I'm Todd Maffin. That's Ahead. Today, digital marketing.

Starting point is 00:00:53 The number of agencies posting to their clients' Facebook and Instagram accounts has fallen sharply according to a Digiday study of 200 agency executives. This year, 65% said they've posted to Instagram. In the previous two studies, that number was 84%. That is, of course, a big drop, but it's even bigger on Facebook. Last year, 81% of agencies posted to Facebook for their clients. This year, only half did.

Starting point is 00:01:22 For those who still are posting, they're doing so less frequently. Previously, 40% of agencies posted daily on their clients' accounts. Now, that's down to 17% for Instagram and 14% for Facebook. The numbers are even more dire when you look at how many agencies are investing in original content for Meta's platforms. Last year, only 4% of agencies told Digiday that they didn't create any original content. Now, that number is 31% for Instagram and 40% for Facebook. Quoting from Digiday's study, agencies are seeing a lack of return on investment when it comes to Meta, particularly with the drop-off in investment in original content. It's possible that agencies found investing in creating content for

Starting point is 00:02:10 Facebook and Instagram didn't actually pay off in the end, unquote. So if organic content is down, paid content must be up, right? Nope. Huge drops there as well in the past year. Again, quoting from Digiday, quote, far fewer agencies are buying ads on Meta's platform this year than last year. After 81% of agency pros told Digiday last year that they'd purchased advertising on Facebook on behalf of clients in the past month, just half said the same this year. And Instagram saw a similar drop, from 81% last year to 48% this year. Along with the previous data, this is another indicator that agencies might not have seen good ROI on ads purchased on Meta's platform last year, so they pulled back a lot on purchasing ads, unquote. Digiday said what's likely behind this drop is an industry perception that Meta's platforms don't perform as well for driving revenue as they used to.

Starting point is 00:03:09 One bit of good news for Meta is that its work on brand safety seems to be paying off. Most agencies polled still say the platforms are brand appropriate for their clients, though that number too is dropping. 75% last year for Facebook to 62% this year. Instagram fared a little bit better. As for the newest member of the meta family of apps, Threads, only about a quarter said they see marketing potential there. A new report from the Wall Street Journal says Amazon used a secret algorithm to figure out how much it could raise prices before its competitors stopped increasing their prices as well. This was disclosed last month as part of Amazon's legal battle with American trade regulators, but had been redacted until now. Here's what the journal says we know about it.

Starting point is 00:04:01 It was called Project Nessie. It would inflate prices, then monitor other retailers like Target to see if they followed with a price raise of their own. If competing retailers kept the lower price, this algorithm would return Amazon's price to the regular rate. Amazon apparently stopped using it in 2019. The current lawsuit accuses Amazon of maintaining its market share illegally. That case is continuing. TikTok is testing a new paid plan which would eliminate ads from subscribers' feeds. Reverse software engineers have found a Pick Your Plan screen buried in the app's code

Starting point is 00:04:44 that says the ad-free plan will be $4.99 per month. This differs from X's version of this, where a paid plan is more expensive and will only eliminate some ads and only from some parts of the app. Normally when this stuff happens, media get a kind of generic PR-speak non-statement like, we're always testing ways to improve our blah, blah, blah, and we have nothing more to share at this time. That didn't happen for this. TikTok actually confirmed to TechCrunch that it's testing this in one English-speaking country that isn't the US. Based on the wording of the screen, it seems as if while ads will be dropped, other types of promotions like influencer partnerships or live shopping would still get through.

Starting point is 00:05:28 TikTok is getting a growing share of media spend, and fewer eyeballs available for media buyers isn't great for marketing campaigns. This is a trend that the big players are watching closely. This week, the Wall Street Journal reported Meta is in talks with European regulators to also add a paid product, which would drop ads for subscribers, made a decline to confirm or deny the report. Do you have business insurance? If not, how would you pay to recover from a cyber attack, fire damage, theft, or a lawsuit? No business or profession is risk-free. Without insurance, your assets are at risk from major financial losses,

Starting point is 00:06:06 data breaches, and natural disasters. Get customized coverage today starting at $19 per month at zensurance.com. Be protected. Be Zen. Your brand's Instagram posts have been used to train Meta's AI models. The admission coming late last week from Meta, confirming what most people assumed, that whatever you post publicly on Meta's AI models. The admission coming late last week from Meta confirming what most people assumed that whatever you post publicly on Meta's platform gives them a whole bunch of rights to use it pretty much however they like. The legal wording of this agreement you make with Meta when you use their platform, of course, doesn't specifically say your posts will be used for AI training.

Starting point is 00:06:39 That contract template was written well before this AI hype, but it does permit wide, non-exclusive use that isn't particularly limited. As for what media specifically was used in the training pool, Meta's a little loosey-goosey. They said the vast majority of the training data came from publicly available posts on Facebook and Instagram, but vast majority doesn't mean only. It's possible Meta used this language to cover itself in case it comes to light that posts intended for private audiences were also used. This is less an issue for brands, which post almost everything publicly. But it does provide some wiggle room for the company in case it later has to disclose that images and text in private messages somehow made it into the pool. Indeed, the language they used around personal data was also couched.

Starting point is 00:07:29 Quoting Meta's Nick Clegg, quote, We've tried to exclude data sets that have a heavy preponderance of personal information, unquote. Clegg told Reuters that Meta believes it can make an argument that its use of uploaded content falls under fair use, but added, quote, I strongly suspect that's going to play out in litigation. And that will bring us to the lightning round. Bing's chatbot now offers DALL-E 3, OpenAI's advanced text-to-image model, but it's still a little buggy. When we tested it, it refused to make photorealistic images,

Starting point is 00:08:04 then suggested we try something like, quote, a realistic model of a computer, unquote, which we did indeed try verbatim. And then Big replied that it couldn't actually do that. The app with authenticity as its positioning, BeReal, has seen a decline in active users with an 18% drop since last November. This according to an estimate from SimilarWeb. The company disputes the numbers, claiming over 25 million daily active users globally. And Amazon over the weekend sent emails to customers warning them about gift card scams

Starting point is 00:08:37 and then claimed that the recipient had purchased gift cards, which they hadn't. Something more than a few people assumed was itself a scam. Reddit was full of screenshots of this email with one person saying, some intern just caused a global panic and is definitely fired. Well, I finished Starfield. Great game, Great story. I have not yet done New Game Plus.

Starting point is 00:09:08 I'm not going to spoil anything in case any of you people are playing it. But I really enjoyed it. And it turns out the end game, at least for me, is creating spaceships that look like marital aids. Because I'm 12. And I find that funny. Follow us on social media. We are on all the new and upcoming ones. Mastodon, Blue Sky, Threads, Pebble, and Spoutable.

Starting point is 00:09:29 We're also on the OG platforms like Instagram, Facebook, and TikTok. Go to todayindigital.com slash social or tap the link in the show notes. I'm Todd Mappin. Thanks for listening. See you tomorrow. So when you do, always make sure you get cash back from Rakuten. And it's not just clothing and shoes. You can get cash back from over 750 stores on electronics, holiday travel, home decor, and more. It's super easy. And before you buy anything, always go to Rakuten first.

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Today in Digital Marketing - Amazon's "Secret Algorithm" Revealed in Court Details

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